Platinum Equity Buys Global Crossing Unit for $41 Million

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Matrix Telecom, an operating unit of Beverly Hills-based Platinum Equity, has agreed to purchase Global Crossing Ltd.’s small-business unit for $40.5 million in cash.


Dallas-based Matrix Telecom is one of 21 operating companies in the portfolio of Platinum Equity, the investment vehicle run by investor Tom Gores. The unit being purchased will add about 30,000 customers to Matrix’s roster. As part of the agreement, Matrix will also purchase a suite of voice, data and IP services from Global Crossing.


The acquisition brings at least a small part of Global Crossing’s vast operations back under the roof of its former headquarters Platinum Equity is now housed in Global Crossing’s former headquarters complex. (Global Crossing is now based in Florham Park, N.J.


A Platinum Equity official said the buyout firm became aware of the Global Crossing unit three years, when Global Crossing was soliciting offers as part of its bankruptcy process, and has kept in touch with the management team of Global Crossing Chief Executive John Legere.


Global Crossing said it anticipates nearly $35 million in net cash proceeds from the transaction after purchase price adjustments, fees and the deduction of retained liabilities.


“Since our primary focus is providing converged communications services to global enterprises and carriers, the sale of [this unit] allows us to concentrate on our core business,” Legere said in a press release.


The sale is subject to regulatory approval and is expected to close during the third quarter of 2005.

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